Report features data on EU pellet, biogas markets

By Erin Voegele | July 21, 2016

A report recently filed with the USDA Foreign Agriculture Service’s Global Agricultural Information Network provides an overview of the European Union’s biofuel market, including data on wood pellets and biogas.

Regarding pellets, the report explains that the EU is the world’s largest wood pellet market, with approximately 20.5 million metric tons of pellets consumed in 2015, with approximately 65 percent of that volume used for heat and 35 percent for power. Demand is expected to increase to 22.5 million metric tons in 2017. The EU currently accounts for approximately 75 percent of the global market for wood pellets. The EU is also the world’s biggest producer of pellets, featuring approximately 50 percent of global production. When compared to North American pellet plants, however, EU plants are primarily small- or medium-sized.

Across the EU, pellet production reached an estimated 13.5 million metric tons last year, and is expected to increase to 14 million metric tons this year and 14.5 million metric tons next year. Imports are also increasing, from approximately 7.172 million metric tons in 2015, to 7.5 million metric tons in 2016 and 8 million metric tons in 2017. Pellet exports from the EU reached approximately 138,000 metric tons last year, and are expected to increase to 180,000 metric tons and 200,000 metric tons in 2016 and 2017, respectively. Overall, the EU consumed approximately 20.5 million metric tons of pellets in 2015, increasing to 21.5 million metric tons this year and 22.5 million metric tons in 2017.

According to the GAIN report, the EU currently had approximately 19 million metric tons of pellet production capacity last year, with capacity expected to increase to 19.5 million metric tons this year and 20 million metric tons next year. Capacity utilization was an estimated 71 percent last year, and is expected to increase to 72 percent this year and 73 percent next year.

Germany is currently the EU’s top pellet producer, with production expected to reach 2.2 million metric tons this year, followed by Sweden with 1.55 million metric tons. Latvia is expected to produce 1.35 million metric tons of pellets this year, with France at 1.13 million metric tons and Austria at 980,000 metric tons. Portugal, Poland and Spain are also among the EU’s top pellet producing nations.

The U.K. is currently the EU’s top pellet consumer, with consumption expected to reach 7.2 million metric tons this year, followed by Italy at 3.5 million metric tons and Denmark with 2.15 million metric tons. Germany, Sweden, Belgium, France Austria, Spain and the Netherlands are also top EU pellet consumers. Pellets are primarily used in residential applications in Italy, Germany, France and Austria. Alternatively, pellets are primarily used for industrial purposes in the U.K., Belgium, and the Netherlands.

The U.K. is the top importer of wood pellets, with 6.519 million metric tons last year, followed by Denmark at 2.068 million metric tons and Italy at 1.64 million metric tons. The U.K. is also the largest importer of U.S. pellets, with 3.528 metric tons imported last year, followed by Belgium at 629,000 metric tons and Italy at 48,000 metric tons.

The U.S. was the largest supplier of wood pellets to the EU last year, with 4.287 million metric tons, followed by Canada at 1.475 million metric tons. Russia, Belarus, and the Ukraine round out the top five suppliers of pellets to the EU.

The report also addresses the EU biogas industry, noting the European biogas sector is very diverse. In some areas biogas production is primarily seen as a means of waste management. In other areas, it is seen as a means of generating renewable energy.

Germany is the leader in biogas production, accounting for 65 percent of total EU production in 2014. Italy, the Czech Republic, the U.K. and Austria feature 14 percent, 5 percent, 3 percent and 3 percent of production, respectively.

The majority of biogas is used to generate electricity, heat or a combination of the two. In addition, the report indicates a growing number of large-scale operations are purifying biogas for use in the natural gas grid. The use of biogas as transportation fuel, however, is still marginal.

A full copy of the report can be downloaded from the USDA FAS GAIN website.